This invention relates generally to debit cards and in particular to a debit card that functions as a prepaid telephone calling card, and is more particularly directed toward a debit card having activation control to forestall fraudulent debit card use.
Credit cards and charge cards are well-known. A credit card entitles the user to revolving credit, in which at least a portion of the outstanding balance must be paid periodically, while the entire balance due on a charge card must ordinarily be paid within a prearranged time.
A debit card allows the bearer to utilize the same purchasing process as with a credit or charge card, with the exception that the holder of a debit card must maintain a nonzero balance in an associated account at all times. Use of a debit card does not involve the extension of credit to the bearer, thus the name xe2x80x9cdebit card.xe2x80x9d
Since many transactions once involving the exchange of cash or commercial paper have become strictly electronic, use of credit and debit cards in a wide variety of transactions has grown rapidly. Debit cards with intrinsic cash value are becoming available at retail outlets, with the purchase of long distance telephone services being among their current primary purposes.
A debit card with intrinsic cash value has no need for an associated account. When these cards are made and transmitted for sale or distribution, they are good for a predetermined dollar amount of goods or services, and the purchaser pays all or a portion of this dollar amount in exchange for the card. To minimize overhead associated with manufacture and distribution, cards of this type are generally usable at the time they are shipped from their point of origin.
Of course, one disadvantage of this approach is that active and completely usable debit cards often hang from display racks in retail outlets, where even a marginally clever sneak-thief could shoplift as many as he pleased. Stolen debit cards are often sold to others at discount prices, or used by the thief.
Active and usable cards could also be stolen in transit to their point of sale with the same result. Because of the effort to minimize production and distribution overhead, there may be no record of the individual serial numbers of stolen cards, and no way to deactivate them even if the numbers were known.
Some efforts have been made to minimize the risk of card fraud. In the simplest scheme known in the prior art, the authorization code, such as a PIN, or personal identification number, is hidden from view by associated packaging. This prevents a thief from simply writing down the PIN and enjoying free long-distance calling without even having possession of the calling card itself.
In the operation of a debit card system, a special telephone number is normally dialed by the user, followed by the PIN number from the debit card. The user then dials the number of the party he wishes to call. A central data base keeps track of the remaining balance associated with the user""s PIN number, and refuses further service after the balance has been reduced to zero. Some prepaid debit card companies provide a recorded message to the user when the debit card balance has been reduced to a predetermined small amount.
The act of concealing PIN numbers from view helps to deter casual theft by simple observation of a visible PIN number, but does not prevent theft of services by one who pilfers the card itself. A more effective deterrent is the distribution of inactive cards only, which cards must be activated at a point of sale before they will function as calling cards.
In one known prior art development, shown in U.S. Pat. No. 5,511,114, blank debit cards are transported to distribution points in an inactivated state. The process for initially activating or recharging such cards involves selection of information via the keys of an appropriate terminal, as well as transmission of an identification number associated with the card. Once a particular transaction type, such as recharging, is selected on the terminal, and the card identification number has been transmitted, the operator enters a dollar amount and is prompted by the terminal to collect money from the purchaser. The remote data base with which the terminal is in contact creates a data base record in response to terminal input, and sends a confirmation back to the terminal. For the type of card transaction just described, the terminal itself is the authorizing instrumentality.
For a simple activation transaction not involving recharging of a card, the operator must still input a transaction type and an initial dollar amount via the terminal, and transmit the card identification number, before authorization can proceed. The remote data base creates a data base record in response to operator input transmitted from the terminal, and returns a confirmation to the terminal that the card identification number has been received. Once again, actual authorization of the card takes place at the terminal, while the remote data base performs a bookkeeping function.
In another prior art system, a paperboard blank having several sections is formed. A first full-sized panel is connected along a line of serrations to a second full-sized panel. A third narrower panel is secured via a line of serrations to the second panel. The third narrower panel secures a smaller sized, prepaid debit card thereto along a line of serrations. The first panel is coated to provide a glossy finish. The second panel bears a magnetic stripe applied as a tape. The debit card is specially coated on both sides and has a PIN number or authorization code printed on the front of the debit card. The PIN number is applied at substantially the same time information is applied to the magnetic stripe. Eventually the third panel is infolded against the second panel, the folded second and third panels are infolded against the first panel and the first panel and infolded second and third panels are secured adhesively to each other. The stripe on the folded blank may thereafter be scanned at a cash register, and the debit card is thereafter activated in response to the scanning, as via a remote computer.
A need exists for an improved secure debit card system having simple activation control.
These needs and others are satisfied by the present invention, which comprises a secured debit card package having an embedded value and being adapted to be sold from open and unprotected retail shelving. The secured debit card package comprises a debit card formed from a first material bearing a card identification number, and packaging means separate and distinct from the debit card and mounting the debit card therein, the packaging means defining a window through which the card identification number is visible, a magnetic stripe disposed on the packaging means, the magnetic stripe bearing an encoded representation of the card identification number borne by the debit card, the stripe being positioned to be scanned by a terminal for reading the encoded representation from the packaging means and for transmitting the encoded representation to a remote processing center for testing of the representation to determine whether the debit card should be activated.
The debit card may bear first and second card identification numbers, with the first card identification number comprising a PIN number, and wherein the packaging means obscures the PIN number on the debit card while rendering the second card identification number visible through the window. The card identification number may be displayed in a bar code format and/or in a human readable format. The package comprises a substantially opaque paper backing with a substantially transparent plastic film covering the debit card.
In accordance with another aspect of the invention, a method is described for providing security for the embedded value of a debit card adapted to be displayed and sold in an unsecured environment such as a retail establishment. The method comprises the steps of providing a debit card having an embedded value with a card identification number, securing the debit card within the package and defining a window through which the identification number is visible, providing a magnetic stripe on the package, reading the card""s identification number through the window, providing an encoded representation of the card identification number on the stripe, the magnetic stripe being positioned on the package to be presented to a terminal for reading and transmission of the encoded representation to a remote computer; whereby, when the remote computer receives the encoded representation, the remote computer may determine whether the embedded value is authorized for use.
The debit card may bear first and second card identification numbers, with the first card identification number comprising a PIN number, and wherein the package obscures the PIN number on the debit card while rendering the second card identification number visible through the window.
The method comprises the further step of receiving the encoded representation at a remote computer and determining whether the embedded value is authorized for use. The remote computer may test the received encoded representation for an anticipated association with the terminal from which the encoded representation was transmitted. The debit card is activated when the anticipated association is present.
In another form of the invention, a debit card system with activation control comprises a debit card bearing a card identification number, a package substantially surrounding the debit card, the package being adapted to make the card identification number visible therethrough, a magnetic stripe disposed on the package, the magnetic stripe bearing an encoded representation of the card identification number, a terminal adapted to read a representation of the card identification number from the package and transmit the representation to a remote processing center, the terminal having a terminal identification number, and a remote processing center for testing the representation and activating the debit card for use by a purchaser.
The debit card may bear first and second card identification numbers, with a first card identification number comprising a PIN number, and wherein the package obscures the PIN number on the debit card while rendering the second card identification number visible.
The remote processing center may test the representation of the card identification number and the terminal identification number, and, if an anticipated association exists, activate the debit card for use by a purchaser.
The terminal adapted to read a representation of the card identification number may read the representation of the card identification number from the magnetic stripe, or from the debit card through the package. The anticipated association may comprise a correspondence between the geographic location to which the debit card was shipped and the geographic location of the terminal identified by the terminal identification number.
Further objects, features, and advantages of the present invention will become apparent from the following description and drawings.